cross subsidy

Definitions

Accounting

  • noun
    (written as cross-subsidy)
    the process of deliberately assigning costs to items in an account in such a way that some items are undercosted and some overcosted

Economics

  • The use of profits from one activity to cover losses from another. Thus the use of high prices for some of a firm's products, for example, to permit it to price below cost for others. In international trade, this could be one explanation for dumping.
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